This needs to be unpacked in a few ways, but it's such a unique insight that it deserves lots of attention. Many people look at Amazon and think that it's just an "online store," but the reason that Amazon works is not because it took the concept of a store and put it online, but because it has always done things that only the internet allows it to do. That is, from its very early days, Amazon was never just about about being a store in a web browser, but in using the web to do interesting and unique things built on top of a commerce core. Things like online user reviews and recommendations may now seem commonplace, but Amazon revolutionized them. And it added so much convenience that many people now use Amazon product pages as default info pages on a product -- I know I do. To me, Amazon isn't just a store, but it's a database of products and reviews -- and that's what Shirky's getting at in saying it's a "search engine with a warehouse." Of course, the cool thing is that when you start thinking about Amazon in those terms is you realize how much more it can do. Those who think they're retailers are going to keep missing where Amazon is heading unless they start thinking the same way.

from the no-real-surprise dept

We were one of a very small number of people who actually saw some logic behind Blockbuster bidding for Circuit City -- though, it seemed unlikely that Blockbuster viewed the purchase in the same way we did. Most people assumed (probably correctly) that Blockbuster didn't really have much of a plan at all, other than to merge the two struggling companies and have an even bigger mess on their hands. Blockbuster has now withdrawn the offer to buy Circuit City, gamely claiming that it has to do with "market conditions" and a better understanding of just how awful Circuit City's books appear to be. That's press release talk. What's more likely is that Blockbuster realized that everyone was right: it would screw up the merger and make a bad situation worse.

from the does-this-make-sense? dept

The news came out early this morning that Blockbuster was making an unsolicited bid to buy Circuit City, which has left many scratching their heads, saying that the synergy isn't all that obvious. Circuit City has been in trouble for a while, and Blockbuster (while a lot healthier than Circuit City) has been facing its own series of challenges. While it's unclear what Blockbuster's plans are, the deal actually could make sense if Blockbuster was really looking distantly into the future about where its market is heading. It knows as well as anybody that video delivery is moving to the internet eventually -- at which point its business model gets a lot trickier. Yet, by owning a retailer selling hardware -- and the rights to content to be distributed to that hardware, things could actually get interesting. Now, I'll say ahead of time that I doubt this is where Blockbuster is heading, but with both movie distribution rights and the ability to sell hardware, it could embrace the economics of infinite goods, by packaging content (infinite) with hardware (scarce), creating a much more compelling offering, than competitors to either firm alone.

from the not-so-hard,-is-it? dept

While the recording industry continues to insist that its world is dying, the music industry continues to thrive -- even if it's not in the same way it did a decade ago. One of the more interesting things about this trend is watching how music retailers have tried to adapt to the change. Not surprisingly, it involves a lot of experimenting, and quite a bit of failure -- but record store owners seem to have realized that not adapting means certain death. One of the big trends we've seen is for record stores (usually independent ones) to recognize that it's important to become destination sites, rather than just music stores. They're also recognizing that record store employees can provide value by being trusted guides. To that end, a well-known UK music retailer is opening a new larger shop, even as many are insisting that music retailing is over. However, this isn't an ordinary record shop. Instead, it's playing up the relationship between the knowledgeable employees and shoppers, providing a lot of counterspace for visitors to talk with staff about what kind of music they might like. It's also becoming more of a destination site, with free WiFi, workshops and a stage for live performances. This certainly isn't a new idea as we've seen very similar reactions from stores for many years, but it does show how more and more of these stores are learning to adapt and change with the times, while the recording industry stubbornly goes down with its obsolete ship.

from the cheap-enough? dept

As Wal-Mart continues its push into consumer electronics, the company has announced plans to sell a stripped down Windows PC at a discount price. While it will run Vista, the rest of the software will be open source (Open Office will be pre-installed instead of Microsoft Office), and, perhaps surprisingly, it will be completely free of crapware, an issue that's been getting a lot of attention lately. There are a number of problems, however. The box won't have much processing power, which is really bad news, considering the demands of Vista. Furthermore, this basic concept has been tried many times before. While it seems appealing, in theory, to completely strip down a computer and sell it at a discount, consumers have never really jumped at the idea. Name brand machines can be had so cheaply, much of the time, that there really isn't much value as there would first seem in Wal-Mart's approach.